Radio's big bully Dirty tricks and crappy
programming: Welcome to the world of Clear
Channel, the biggest station owner in America.

- - - - - - - - - - - -

By Eric Boehlert

April 30, 2001 | In the late 1990s, while no
one was looking, a corporate behemoth became
the largest owner and biggest force in
America's most venerable mass medium:
commercial radio.

Radio stations that once were proudly local
are now being programmed from hundreds of
miles away. Increasingly, the very DJs are in
a different city as well.

Want your record played on one of those
stations? Be prepared to pay -- dearly -- for
the privilege. Want your band's concert to be
sponsored by a radio station? Be careful: If
you pick a competitor, the behemoth might
pull your songs off its playlists overnight
-- from two, 10, 100 stations.

Looking for classy radio programming? Don't
look here. The company is known for allowing
animals to be killed live on the air,
severing long-standing ties with community
and charity events, laying off thousands of
workers, homogenizing playlists and a
corporate culture in which dirty tricks are a
way of life.

Welcome to the world of Clear Channel --
radio's big bully.

- - - - - - - - - - - -

It was a bittersweet night last June for the
40 to 50 radio executives and on-air
personalities from the AMFM Network,
including countdown king Casey Kasem. The
scene was the famous Spago restaurant in West
Hollywood for a night of eating and drinking
on the company tab.

It was sweet: Everyone was in town for the
annual R&R trade magazine industry
convention, and it was a rare opportunity to
schmooze with colleagues face to face at the
plush Sunset Boulevard eatery.

Bitter though, as well, because the dinner
marked the end of 460-station AMFM as an
independent entity. Its parent company was
being purchased by Clear Channel
Communications -- for a stunning $24 billion.

Many in the room recognized that in the
compressed world of radio consolidation, AMFM
as they knew it would cease to exist and many
of them would soon be squeezed out of jobs.

Indeed, that same night at Spago, Clear
Channel's radio chief, Randy Michaels, just
happened to be holding court along with half
a dozen minions of his own. A true radio
original, Michaels had achieved legendary
status inside the business as a shock jock
(before there was a Howard Stern), and an
effective but often tasteless programmer.

Michaels moved into management in the 1990s.
Today, as Clear Channel's guardian of the
airwaves, the bombastic exec is among the
most powerful, not to mention colorful, men
running the music business.

"Everything's a food fight with him," says
one radio executive, who says Michaels is
still a morning man at heart. "He's paranoid,
disingenuous, pathological. That's what makes
him so lovable."

The mood at Spago was cordial. Michaels even
wandered over to the AMFM party to give a
rah-rah speech about the upcoming AMFM/Clear
Channel partnership.

As the party wound down and the crowd cleared
out, two AMFM producers were unexpectedly
waved over to the Clear Channel table by
Michaels and his friend Kraig Kitchin, who
runs Premiere Radio Networks, Clear Channel's
powerful syndication arm.

According to industry sources, Michaels and
Kitchin proceeded to grill the producers
about AMFM shows and personnel. The
producers, somewhat loquacious after an
evening of food and spirits, spoke frankly,
disparaging many AMFM initiatives and radio
personalities.

Within days, AMFM Network president David
Kantor heard from Kitchin. Kantor was told
that once the merger was through, the two
producers who'd spoken so bluntly would be
let go. Michaels, Kitchin said, was not
happy. Kantor was even given proof of the
producers' bad-mouthing; the conversation at
Spago had been surreptitiously recorded by a
cellphone on the table. Kantor had been
played parts of it.

"These guys didn't even work for Clear
Channel yet and they were set up," says a
former AMFM employee. "They used that
conversation to fire them. Here's the head of
Clear Channel and he's taping conversations?
It's insane. It was a classic Randy Michaels
dirty trick. He was just fucking with their
heads; that's what they do."

- - - - - - - - - - - -

Radio companies used to be severely
constrained from owning what from the
government's perspective was too many
stations. Companies could own only two in any
one market and no more than 28 nationwide.
Government policy enforced the notion that
radio was broadcast on the public airwaves
and had an accompanying public trust. Local
stations were supposed to be assets to local
communities. The ownership rules were
designed to keep ownership as diverse as
possible and keep the stations' focus as
local as possible.

All that changed in the 1990s. Five years
ago, President Clinton, pressured by a
GOP-controlled Congress, signed into law the
Telecommunications Act, which essentially did
away with ownership restrictions on radio.
Now, just a handful of companies control
radio in the 100 largest American markets.

Of these, Clear Channel rules the horizon
with 1,200 stations, which generate more than
$3 billion annually in revenues.

How big is Clear Channel? The company owns
stations in 247 of the nation's 250 largest
radio markets. Clear Channel in particular
dominates the Top 40 format (KIIS-FM in Los
Angeles, WHTZ and WKTU in New York, KHKS in
Dallas, WXKS in Boston, WHYI in Miami, etc.)
and controls 60 percent of rock-radio
listening.

While radio's mad dash of consolidation was
perhaps inevitable, it has still sent shock
waves through the industry. Indeed, it's hard
to say which puzzles the industry more -- that
one company has so quickly amassed such an
enormous, 1,200-station roster or that a
former shock jock like Michaels is running it.

The Wall Street Journal recently toasted
Michaels as the never-grow-up "Peter Pan" of
radio. An anonymous straw poll among radio
and record pros, though, would probably
reveal more who now see Michaels as Captain
Hook. (He and other top Clear Channel
executives declined to be interviewed for
this story.)

Michaels has become the symbol of Clear
Channel's dominance of an entire,
multibillion-dollar media industry. What's
made that adjustment so difficult for some is
Clear Channel's litigious, cost-cutting,
arrogant style of business.

And it's an attitude Michaels sets from the
top.

Ever since Clear Channel's AMFM acquisition
was completed, a simmering discontent has
been brewing, prompted by some particularly
heavy-handed moves on Clear Channel's part.
"They were on their best behavior before
AMFM, but now they're getting nasty," says
Robert Unmacht, former editor and publisher
of the M Street Journal, which tracks the
radio business.

For instance, Clear Channel owns Premiere
Radio Networks, which syndicates popular talk
shows like those of Rush Limbaugh and Laura
Schlessinger to hundreds of stations across
the country.

Earlier this year Clear Channel sent out
letters to non-Clear Channel stations that
used Premiere features, informing them that
their popular talk shows, including
Limbaugh's and Schlessinger's, would be
summarily yanked and moved immediately to
Clear Channel competitors across town.

(Other large radio-owning conglomerates own
syndicated shows as well, but as yet none
have been wielding the programming in such a
blatantly domineering way.)

"We spent hundreds of thousands of dollars
over the past 12 years promoting the Rush
Limbaugh show locally and we're paid back
with a letter telling us it's being moved to
our direct competitor," laments Glenn Gardner
of talk station WTDY and rock outlet WJJO,
both in Madison, Wis.

"We weren't even given a chance to bid and
hang onto the show. Clearly what they're
trying to do is squeeze everybody else out.
We contacted [Wisconsin Sen.] Russ Feingold
and told him this really needed to be looked
at."

An even more recent example of Clear
Channel's hardball style: On the very day
radio-ratings company Arbitron went public
with a Wall Street offering this month, Clear
Channel decided to announce to Arbitron -- and
its investors -- that the behemoth would not
be renewing its contracts for the company's
ratings surveys in 130 markets that were then
under negotiation. The announcement represents
a huge hit that could cost Arbitron tens of
millions of dollars in lost revenues annually
-- not to mention dampen the company's newly
public stock.

- - - - - - - - - - - -

Over the past few years, there has been no
shortage of industry players who would rail
about Clear Channel and argue that the
company was "ruining radio in so many
different ways."

Off the record, that is.

"People in this business don't know who
they're going to be working for next week. So
a lot of them are just plain afraid to speak
out," says Gardner. "It's a conspiracy of
silence. It's really bizarre."

That silence is now being broken.

"They're definitely bullies, no question
about that," says Ed Levine, chairman of
Galaxy Communications, whose stations compete
with Clear Channel in several upstate New York
markets. "They've truly become the evil
empire. Like everything else, Clear Channel
has gone too far, gotten too greedy and too
powerful. As a broadcaster who grew up in the
business I don't believe their overall net
effect for radio has been positive."

Marv Nyren, the marketing manager for four
Phoenix stations of Emmis Communications, the
nation's sixth-largest station owner, echoes
that idea: "Most don't believe what they've
done is good for the industry. They're all
about quantity, not quality. They've taken
the value out of radio and turned it into a
commodity."

Clear Channel does have its share of
supporters. "Ultimately these are people who
will do what's right for the industry,"
insists Larry Roberts, president of Fisher
Regional Radio Group.

Adds one Clear Channel programmer: "It's an
aggressive company with foresight. They want
to be the pioneers. The industry is going
through fundamental change right now and some
people are threatened by that."

It's not just the sheer number of stations
that upsets so many people. Thanks to
laissez-faire regulators in Washington, Clear
Channel quickly has put together a stunning
piece of vertical integration in big-money
pop culture. Last year, the company spent
$4.4 billion to purchase SFX Entertainment,
the nation's dominant concert venue owner and
touring promoter. Clear Channel also owns a
radio research company, a format consultancy,
regional radio news networks, an airplay
monitoring system, syndicated programming,
radio trade magazines like the Album Network,
19 television stations and 700,000 outdoor
billboards worldwide. With so many resources
at hand, the company has all but cut off its
business with outside vendors.

"Clear Channel's not looking to be part of an
industry, but rather a world unto themselves,
and a lot of people resent that," says
Unmacht.

Record company executives are particularly
resentful about how Clear Channel stations
leverage their playlists to make sure its SFX
concert-promotion division lands certain tours.

Since concert fans listen to the radio a lot,
there has long been a symbiotic relationship
between concert venues and local radio
stations. Ceaseless radio promotion helps
sell concert tickets; and association with
the hottest concert tours gives the stations
concert tickets to give away and valuable
P.R. identification with the best shows in
town.

Clear Channel, the company's critics say, has
been using its size to wrestle away tours from
competitors by leveraging its size against
record companies and artists.

"Clear Channel comes into markets and says to
record companies, 'Don't give that station a
concert or band promotion or there will be no
business with us across our platform of
stations,'" reports Hal Fish, program
director at WBZX and WEGE in Columbus, Ohio.

Representatives from two platinum-selling
rock bands confirm that their acts were
pulled from Clear Channel stations over
concert-promotion disputes, and not just
pulled locally. The bands were yanked off
playlists from a coalition of aligned Clear
Channel stations stretching over several
states. "It did happen; it was real," reports
one label executive.

The groups' representatives spoke on
condition the artists' names not be used, for
fear of further irritating Clear Channel.

"Clearly the FCC [Federal Communications
Commission] and the Department of Justice do
not understand the connection and the power
[Clear Channel] has" from owning so many
radio stations and concert outlets, complains
one concert promoter.

That controversy, though, pales in comparison
to the one that's brewing over Clear Channel's
second major power grab.

Pressured by Wall Street to find new streams
of nontraditional revenue, Clear Channel, as
Salon reported several weeks ago, is busy
forging an exclusive alliance with a radio
promotion company called Tri State Promotion
& Marketing. The unprecedented deal could
reap Clear Channel tens of millions of
dollars.

Radio promotion firms -- or "indies" -- serve
as well-paid middlemen or lobbyists, paid by
record companies to get their songs played on
radio stations. (The middlemen are necessary
as "cut-outs": If labels paid directly for
the airplay and stations didn't notify
listeners, both would be in violation of
payola laws.) The indies pay radio stations
amounts in the six figures in return for an
exclusive relationship -- and invoice record
companies thousands of dollars every time a
station adds a new song to its playlist.

This multimillion-dollar promotions game has
of late become less about salesmanship and
more about market control. Now, say industry
sources, Clear Channel, through Tri State,
wants a piece of that lucrative pie.

By gaining exclusive access to Clear
Channel's roster of playlists, Tri State, run
by Michaels' old Cincinnati friend Bill Scull,
could create steep new tolls for record
companies wanting to get songs on the air on
the nation's biggest broadcaster. And a part
of those tolls will presumably find their way
back to Clear Channel's corporate bottom line.

"They're going to gouge us," fears a record
label rep.

The exclusive alliance would come at the
expense of other indies who would likely lose
their Clear Channel stations as clients. "For
guys who are basically in the underbelly of
consolidation, who probably got more than
they should have, and are right on the cusp
of anti-competition, I wouldn't be quite so
aggressive. They're going to get their tit
caught in the wringer."

"They're starting to rain all over
everybody's parade and take food off people's
tables, and that's when you get in trouble,"
says one radio veteran who has dealt with
both Michaels and Clear Channel for years.

- - - - - - - - - - - -

Michaels' career has been remarkable. Born as
Benjamin Homel, he's a broadcasting enthusiast
who has been known to rebuild old radios in
his spare time. Fellow programmers credit him
for helping create modern country radio back
in the 1970s with WDAF in Kansas City, Mo.,
where he spun country songs at a Top 40 pace.
And he's given credit for bringing legendary
AM stations back to life, like WLW in
Cincinnati, by reinvesting in news
departments.

Behind the mike he made a name for himself
back in the '70s and '80s farting on the air,
cracking jokes about gays and tantalizing
listeners with descriptions of "incredibly
horny, wet and ready" naked in-studio guests.
Along with getting hit with a sexual
harassment suit, Michael pulled in big
ratings wherever he went.

Ten years ago, he was an officer of a
Cincinnati company called Jacor, which was
founded in 1981 when Terry Jacobs bought up
three religious radio stations. By 1990 it
was a little-known radio outfit teetering on
bankruptcy whose shares were trading for 75
cents.

But in 1993, Michaels made a key move. He
persuaded self-described "vulture capitalist"
Sam Zell to invest $70 million in the ailing
Jacor. The swashbuckling investor, once
described by Fortune as an "elfin billionaire
who tools around Chicago on a motorcycle the
size of an armored car," quickly bonded with
the freewheeling Michaels. Soon Jacobs
announced he was "retiring"; Michaels was
given the Jacor reins and the OK to start
buying stations.

Together, Michaels and Zell banked on their
belief that legislators would soon ease
ownership restrictions on radio owners. Back
in 1995, station owners, represented by the
mighty lobbying arm of the National
Association of Broadcasters, found lots of
friends in Washington busy drafting the
telecommunications bill.

"The problem was the Republican Congress
wanted not to rewrite the rules but eliminate
them," recalls former FCC chairman Reed Hundt,
who, along with the Clinton White House,
opposed such drastic action. "The question
was, 'Who's your constituency, the listener
or the owner?' There was no question of who
the Republican constituency was."

Hundt and President Clinton favored easing
ownership restrictions, but at a more go-slow
pace. In the end, says the former FCC
commissioner, "the White House position on
radio got rolled."

Corporate broadcasters were jubilant. Others
in the business were not: "They gave the
forest to the clear cutters," says one.

The ink on the Telecommunications Act was
barely dry in January 1996 when Jacor, which
at the time owned just 25 stations, started
scooping up properties. Three years later
Jacor had added 425 more stations to its
roster.

In the meantime, another aggressive company,
Clear Channel, was buying up stations as
well. The company was built by Lowry Mays, a
Texas A&M graduate who studied petroleum
engineering and later got a degree from
Harvard Business School. Mays fell into the
radio business in 1972 when he guaranteed a
bank note for a friend buying a San Antonio
station. When his friend bailed, Mays, then
an investment banker, took over the station
himself. Over the years he continued to grow
the company with acquisitions.

Like Zell at Jacor, Tom Hicks at Chancellor
Media and Mel Karmazin at Infinity
Broadcasting (he's now president of mighty
Viacom), Mays went on a post-deregulation
buying spree. With his bold $24 billion move
in 1999 for AMFM, the deal that essentially
marked the end of the consolidation spree,
Clear Channel reigned as king of radio's
hill. "Nobody in Vegas would have handicapped
that -- Clear Channel finishing in the No. 1
position," notes one radio pro.

Along the way, Clear Channel fixed its eyes
on the smaller Jacor. Zell sold his company
to Clear Channel in 1998 for $3.4 billion;
his Jacor investments reaped a $1 billion
profit.

But as part of the deal, Michaels and his
cliquish team were put firmly in control of
the new operation's radio properties. If they
hadn't been, it would have cost the new owners
more than $100 million in executive payouts.

"What's amazing is that Jacor swallowed up
Clear Channel," says Levine at Galaxy
Communications. "Older Clear Channel guys are
still scratching their heads. They can't
figure out how it happened."

"Clear Channel before Randy [Michaels] was
not hated," says Jerry Del Calliano,
publisher of Inside Radio. (Del Calliano and
Michaels have had a running range war for
years. The two are currently facing off in
court.) "But with the addition of the Jacor
boys, Clear Channel became another company
entirely," Del Calliano says.

What buttoned-down Clear Channel inherited,
says Unmacht, were "basically good ol' boys
from the frat house. They want to see who can
be the rudest and crudest. Everything is done
with the attitude of 16-year-olds in gym
class, but with modern-day business smarts.
They're definitely a rough lot." A few years
ago Unmacht had dinner with an entourage of
Jacor executives, including Michaels, at a
Cincinnati restaurant, where they pointed out
the still-visible stains from butter patties
they had thrown at light fixtures.

That corporate culture extends down to the
stations in various ways. It was given
national exposure in the '90s when Jacor jock
Liz Richards, working out of WFLA in Tampa,
Fla., sued the company, including Michaels
personally, for sexual harassment.

Interviewed on ABC's "20/20" program in 1992,
Richards alleged that male co-workers dubbed
her president of the "Cunt Club," that on the
employee sign-in board someone drew a
caricature of her with a penis ejaculating in
her mouth and that a station manager falsely
bragged to colleagues at a business dinner
about getting head from Richards in a
limousine.

Gary Kelly, a friend of Richards', appeared
on camera to tell about the time he showed up
at a station event to meet Richards and was
told by her boss that the single mother of
two was busy giving blow jobs in the parking
lot.

At the time, Michaels was vice president of
programming and an on-air personality at
WFLA. Richards said he had a hand in setting
the station's tone -- she told ABC he once
roamed the station halls with a flexible
rubber penis tied around his neck, accosting
female employees.

Michaels would not be interviewed on the
show, and rejected the charges.

Jacor's response? "We are going to be forced
to make public certain things about
[Richards'] behavior which are going to
further tarnish her reputation," Dave
Reinhart, WFLA station manager and close
friend of Michaels, told the St. Petersburg
Times. Richards' suit was settled out of
court in 1995.

More recently, Jacor's Tampa stations were
back in the news in February, when WXTB
morning man Todd Clem, who has the on-air
handle "Bubba the Love Sponge," broadcast the
killing of a live boar from the station's
parking lot. WXTB posted pictures of the
blood-soaked stunt on its Web site. It was
the third time in a year that an animal was
killed or tortured on-air at a Clear Channel
station.

"They are not the most original people in the
world, so if something works and gets a
reaction they'll do it all over the place,"
notes Greg Mull, who programmed WXTB before
Jacor bought the station.

Back in the Jacor days, the boar-killing
incident likely would have been laughed off.
But now Michaels has to answer to a boss --
Mays, who besides being the patriarchal
founder and chairman of Clear Channel, is
also a friend of former President Bush's.

"I'm sure all of that made Lowry really
uncomfortable," says Unmacht. Mays declined
to comment for this story.

While Mays and his two investment banking
sons, Mark and Randall, keep a tight rein on
Clear Channel's financials, Michaels runs the
radio properties. But broadcasters say there's
a reason even the company's own employees
refer to it as "Cheap Channel"; the Mays
family demands high returns for Wall Street
through Draconian cost cutting.

Michaels has become a believer in cost
cutting; one of his innovations is the
implementation of centralized, bureaucratic
control over stations. Most Clear Channel
stations are now overseen -- and programmed
-- by regional, not local, programmers.

Unmacht agrees: "It's clear that Lowry Mays
has changed him. He's a very different Randy.
Now it's all business -- profits, losses and
trying to stay in the good graces of the
Mayses. Randy would like to have good
programming. We're just not seeing what he
could do with a free hand. We saw that at
Jacor and it was very good. But the pressure
is now on to do more with fewer people.
Everything needs to show a profit yesterday."

"It's difficult to do good radio and I think
Clear Channel is overworking people, which
ultimately drives down morale and success,"
worries the head of radio promotion at a
major record label.

Through a process known as "cyber-jocking,"
Clear Channel has eliminated hundreds, if not
thousands, of DJ positions (and saved tens of
millions in salary) by simply having one
company jock send out his or her show to
dozens of sister stations. Thanks to clever
digital editing, the shows still often sound
local. And this isn't just for the graveyard
shifts but for midday and even morning-drive
shows.

Today, traveling across the country, radio
listeners hear not only the same songs over
and over but the same jocks from coast to
coast. For instance, the midday show by a DJ
named Randi West has aired simultaneously on
Clear Channel stations in Cincinnati;
Louisville, Ky.; Des Moines, Iowa; Toledo,
Ohio; Charleston, S.C.; and Rochester, N.Y.

According to radio sources, though, the Clear
Channel jocks used in this fashion often
receive little or no extra money for filling
on-air vacancies in dozens of extra markets.

The company claims that it's a way to
broadcast major-market talent in small-town
stations. But do FM stations in Phoenix
really need help landing major talent?
Apparently they do: Clear Channel's Top 40
station there, KZZP, has been rebroadcasting
Rick Dees' morning show from KIIS-FM in Los
Angeles.

Why? The only expense for the Phoenix station
is paying a board operator. "They've got a
morning show for $6 an hour. That's not
programming for the listeners," says Nyren at
Emmis.

After purchasing WNUA in Chicago, Clear
Channel last year shut down the WNUA Cares
for Kids Foundation, which had raised
hundreds of thousands of dollars for charity.

For more than 20 years in Louisville, AM
mainstay WHAS had exclusively aired the Great
Balloon Race during the Kentucky Derby
Festival. Late last year the Clear Channel
station, which in the past had paid a rights
fee for the community event, informed derby
officials the station now wanted to get paid
for airing the event. "What this signaled to
me was that there was a change in the way
that they are choosing to promote community
events," Derby Festival president Mike Berry
said at the time.

To be fair, Clear Channel is not alone when
it comes to heavy-handed cost cutting in
radio these days. Two weeks ago the Chicago
Sun-Times reported that local Infinity
country station WUSN told its on-air jocks
they had to attend the George Strait Music
Festival and work the crowd.

What was wrong with that? The jocks had to
buy their own tickets!

The station's management suggested they buy
lawn seats, which started at $30. How much
money did the penny-pinching WUSN bill in ad
sales last year? Nearly $50 million.

- - - - - - - - - - - -

Will Clear Channel, radio's big bully, get
away with all this?

Can national programmers impose their prefab
formats on local radio stations? Won't
audiences revolt?

There is some evidence that consolidation
economics has damaged radio's popularity.
Desperate for additional revenue, stations
have substantially increased the number of
commercials aired, often cramming 15 or 20
minutes' worth of ads in each hour.

Listeners have taken note of the onslaught.
In just the past seven years radio listening
has declined nearly 15 percent, according to
Arbitron. One in three listeners between the
ages of 12 and 24 recently told Arbitron they
were listening to less radio specifically
because of the commercial overload.

"It pains me to say it, but radio sucks and
it has sucked for the better part of
consolidation," says Del Calliano at Inside
Radio. "And anybody who loves radio knows
that. You'd have to be working for Randy
Michaels to say otherwise."

- - - - - - - - - - - -

About the writer
Eric Boehlert is a senior writer at Salon.
boehlertAThome.com